Steel Construction New Zealand, the representative body for the country’s structural steel industry, has welcomed the recent announcement about the Labour Party’s government procurement policy, but says the key to its success will be in ensuring public sector agencies apply the policy when tendering contracts.

Steel Construction New Zealand Manager Alistair Fussell says Labour is on the right track.

“The structural steel industry will support any policy that benefits our industry and the economy as a whole, especially if it helps improve productivity and competitiveness, and creates more skilled jobs. We’re looking forward to seeing more detail, but it certainly seems Labour is adding more substance to the current framework, and that’s a very positive move.”

Mr Fussell says the existing procurement framework, particularly the five Principles of Government Procurement, are not producing the desired outcomes.

“For example the fourth Principle regarding balanced decision making is supposed to ensure agencies seek the best value for money over the lifetime of the goods or services, and make balanced decisions by considering the social, environmental and economic effects of the deal.

“But there’s been no guidance given to government agencies on exactly what the Principle means and how it should be applied. The inevitable outcome is that local industry is disadvantaged because many government agencies remain solely focused on achieving the lowest upfront cost – which usually favours overseas suppliers. So we’d encourage Labour to factor the provision of clear guidance in to their policy.”

Mr Fussell noted Labour’s plan to bring subcontractors in to the framework by reversing Rule 22 in the Government Rules of Sourcing was good for the wider construction industry: “Rule 22 currently exempts subcontractors from the Rules, but this makes absolutely no sense because 80-90 percent of the work done in the industry is in fact performed by subcontractors.”

Steel Construction New Zealand also welcomes Labour’s inclusion of a transparent reporting framework to hold public sector agencies to account for their procurement decisions.

Mr Fussell says while he’s clearly looking to boost opportunities for the local structural steel industry, he remains mindful of New Zealand’s international trade obligations. But he says other governments, such as Canada, are taking a more progressive approach to procurement.

“We understand the Canadian government – also a Trans-Pacific Partnership Agreement signatory - is seeking to include provisions in its procurement policy which reward sustainable practice and provide opportunities for Canada’s first nation peoples. That’s the direction New Zealand should be heading in.”